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![Evolution Of Sourcing“Almost 50% of best-in-class enterprises that source strategically using best practice strategic sourcing techniques report more than four times greater procurement cost savings, better supply performance, and greater profitability than industry peers.” From: Strategic Sourcing in the Mid-Market Benchmark: The Echo Boom in Supply Management [206], Aberdeen Group, December 2005](https://image.slidesharecdn.com/miesolutionspresentingautomatingsupplierrelationshipmanagement-110425143043-phpapp02/75/MIE-Solutions-Presenting-Automating-Supplier-Relationship-Management-2-2048.jpg)
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MIE Solutions Presenting Automating Supplier Relationship Management
The document discusses automating supplier relationship management (SRM) and highlights the benefits of strategic sourcing, including significant cost savings and improved supplier performance. It covers e-sourcing, particularly reverse auctions, as a method for efficient procurement and emphasizes the importance of supplier visibility through digital marketing and online directories. Additionally, it addresses the evolution of sourcing processes and the necessity for suppliers to communicate their total value management effectively.
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MIE Solutions Presenting Automating Supplier Relationship Management
- 1. Automating Supplier RelationshipManagementDavid FergusonPresidentMIE Solutions
- 2. Evolution Of Sourcing“Almost50% of best-in-class enterprises that source strategically using best practice strategic sourcing techniques report more than four times greater procurement cost savings, better supply performance, and greater profitability than industry peers.” From: Strategic Sourcing in the Mid-Market Benchmark: The Echo Boom in Supply Management [206], Aberdeen Group, December 2005
- 3. What is SupplierRelationship Management? Supplier Relationship Management (SRM) involves defining and managing all aspects of supplier relationships, from information sharing and collaboration to sourcing, negotiating and streamlining purchasing activities.
- 4. OverviewWhere have webeen? Or are we still in the past.What is driving this automation?Spend Management - Sourcing ValueDiscussion of Supply Side Relationship ManagementDiscussion of Buyer Side Relationship Management
- 5. Where Have WeBeen?U.S. Post OfficePhone CallsFaxingEmail We started from responses taking days to responses taking seconds
- 6. What is DrivingAutomation?Lean ManufacturingOutsourcingOff-shoringShorter Product LifecyclesGlobal Competition
- 7. Contract Manufacturing MarketDriversDue to the intensifying competition in the contract manufacturing market, the abilities to drive operational efficiencies and better customer/supplier relationship management will help companies to stay competitive
- 8. Measuring Supplier ValuePricePer Unit (PPU)Actual Supplier CostTotal Cost Of Acquisition (TCA)PPU + Direct CostsTotal Cost Of Ownership (TCO)TCO + Indirect CostsTotal Value Management (TVM)
- 9. Measuring Supplier Value Suppliers need to convey the message of Total Value Management to improve their position among the buyers of the world.
- 10. What is E-sourcing? E-Sourcing products help companies save money on major spend categories through online negotiation with suppliers, either via a reverse auction or an RFX process.
- 11. What is E-sourcing? E-Sourcing products help companies save money on major spend categories through online negotiation with suppliers, either via a reverse auction or an RFX process.
- 12. What is areverse auction? A reverse auction is a tool used in industrial business-to-business procurement. It is a type of auction in which the role of the buyer and seller are reversed, with the primary objective to drive purchase prices downward. http://en.wikipedia.org/wiki/Esourcing
- 13. Supply Side AutomationSupplyside automation is Letting the buyers of the world know you exist2. Interacting with buyers efficiently
- 14. Who Are You? Priorto receiving an request for quote or purchase order the buyer needs to know you exist!Create A WebsiteYou must have a good web presence so potential clients can find you.
- 15. Submit your websiteto the major search engines, .i.e. Google, Yahoo, Bing
- 16. Submit your websiteto the industrial directories on the internet.Yellow Pages? The yellow pages is not where you advertise in the age of the internet. Buyers look in Industrial Directories For suppliers.http://www.thomasnet.com
- 17.
- 18. http://www.mie-exchange/idirHow To GetRFQ’s Sales in the age of the internet has changed drastically which opens up many more ways to acquire potential accountsLead GenerationTelemarketing
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- 20. Silent Auctions, StandardAuctions, Reverse Auctions
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- 22. Existing BuyersTelemarketing A telemarketeris a person who makes outbound calls to prospective buyers of their products or services.This is not the most efficient method.
- 23. Industrial Directories There aremany industrial directories on the web includinghttp://www.thomasnet.comhttp://www.globalspec.comhttp://www.mie-exchange.com/idir
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- 25. Existing Buyers Existing relationshipsis one of the most affective ways to get new work.
- 26. Organizing RFQ’sWays toorganizeRequest For Quote LogPrioritizing Request For QuotesCapture Rates
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- 30. ConclusionList 3 or4 bullet points to review the goals/objectives covered“Let’s take a minute to review the take-away points of this presentation.”
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- 32. Thank you!David Ferguson/ MIE Solutionsdave@mie-solutions.com(714) 786-6230
Editor's Notes
- #3 http://www.esourcingwiki.com/index.php/ArticlesAcademiaDeciding on the Appropriateness of B2B Reverse Auction Technology Adoption: An AHP Approach Combined with Integer ProgrammingAuthored by Tobias Schoenherr and appeared in Journal of International Technology and Information Management, Vol. 13, No.1/2, 2004, pp. 21-32.BlogsE-Sourcing ForumAuthored by David Bush and maintained by eSourcing leader - Iasta Sourcing InnovationAuthored by Michael Lamoureux, a thought leader for supply chain and procurement issues Spend MattersAuthored by Jason Busch, a thought leader and evangelist for spend management news and debate Procurement CentralAuthored by Dave Stephens, founder of Coupa and former VP Procurement Applications - OraclePublished ArticlesLow Cost Country Sourcing: Driving through the steps required for successArchstone Consulting: Brad Blonkvist, Director; John Kamauff, Principal Supplier Relationship Management: Maximizing the Value of Your Supply BaseArchstone Consulting: Len Prokopets and RaminTabibzadeh Lean Sourcing : Creating Sustainable Purchasing SavingsAn executive whitepaper written by Aptium Global, Inc.Maximizing Potential Benefits in Reverse Auction - A FrameworkInfosys Technologies Ltd: Amitava and HariharanNoorani
- #4 Supplier Relationship Management. Extending business relationships has become the focus of the newactivities and collaboration possibilities sparked by Internet technology. As the new model for supply chainoperations, collaborative commerce is more than just automating company-to-company connectionsthrough the Internet. Rather, it is a strategic approach to leveraging critical inter-enterprise relationships.Supplier Relationship Management (SRM) involves defining and managing all aspects of supplierrelationships, from information sharing to embracing mutually beneficial business processes. SRM is amore effective way of doing business that goes well beyond the traditional collaboration model of design,source, negotiate, and buy, to streamline activities, such as supply, replenishment, manufacturing,services management, and analytics.
- #5 http://www.esourcingwiki.com/index.php/ArticlesAcademiaDeciding on the Appropriateness of B2B Reverse Auction Technology Adoption: An AHP Approach Combined with Integer ProgrammingAuthored by Tobias Schoenherr and appeared in Journal of International Technology and Information Management, Vol. 13, No.1/2, 2004, pp. 21-32.BlogsE-Sourcing ForumAuthored by David Bush and maintained by eSourcing leader - Iasta Sourcing InnovationAuthored by Michael Lamoureux, a thought leader for supply chain and procurement issues Spend MattersAuthored by Jason Busch, a thought leader and evangelist for spend management news and debate Procurement CentralAuthored by Dave Stephens, founder of Coupa and former VP Procurement Applications - OraclePublished ArticlesLow Cost Country Sourcing: Driving through the steps required for successArchstone Consulting: Brad Blonkvist, Director; John Kamauff, Principal Supplier Relationship Management: Maximizing the Value of Your Supply BaseArchstone Consulting: Len Prokopets and RaminTabibzadeh Lean Sourcing : Creating Sustainable Purchasing SavingsAn executive whitepaper written by Aptium Global, Inc.Maximizing Potential Benefits in Reverse Auction - A FrameworkInfosys Technologies Ltd: Amitava and HariharanNoorani
- #6 In the beginning, there was Purchasing. Firms needed raw materials and supplies to operate, so organizations hired someone to order those materials. It was a simpler time, and most organizations manufactured their goods completely in-house. As a result, material costs represented a smaller ratio of the overall cost of operations, while labor represented a larger ratio. Then change started happening – quickly. New concepts, procedures and products helped introduce mass production, mass consumption, and, eventually, the computer and the Internet to businesses and people. The age of the simpler time came to an end, and Purchasing needed to keep up with the world around it. The company’s competition, potential/current supply-base and customer-base had become more global, adding to the complexity. To help manage the increased global nature of their business, Purchasing had to adopt a global supply management and supply chain strategy. The purchasing team was responsible for a wider range of tasks, which included understanding the complete supply chain as it relates to the company. These days, not only is the purchasing team responsible for knowing what a company needs to buy, from whom, and when, but also the location of current and potential supply sources, who the suppliers’ suppliers are, and, finally, the market dynamics affecting the related supply markets. Purchasing became “Sourcing”, and then “Strategic Sourcing”. As noted in Wikipedia:http://books.google.com/books?id=2g1JX-tjORIC&pg=PA250&lpg=PA250&dq=supplier+relationship+management+phone+calls&source=bl&ots=3JHml04wx6&sig=9IKm0J4d37Z3tFgUBygtC2UrlQQ&hl=en&ei=Fe-rSqWJFIOqtgOaioCTBQ&sa=X&oi=book_result&ct=result&resnum=8#v=onepage&q=supplier%20relationship%20management%20phone%20calls&f=false
- #7 1. The process of lean manufacturing has been around for decades supporting the transformationfrom “push” operations to “build to order” operations. These pull type systems are addingmore and more demand for real time visibility and control of the in-plant inventory includinginbound material, WIP material, and outbound finished goods.2. As manufacturers increase focus on their key market differentiators and highest value-addprocesses, less critical items are being outsourced. This trend has significantly raised thenumber of suppliers for many manufacturers requiring more sophistication in the receiving, putaway,and picking processes prior to production.3. Similar to outsourcing, customers are taking advantage of low cost countries to provide variouscomponents. The downside of this business method is significantly increased lead times fromoverseas suppliers and larger order sizes that are required to maintain production withoutinterruption. Space availability quickly becomes a key pain point for the manufacturing facility,sometimes causing manufacturers to take on the expense of off-site warehouses used formetering materials to the plant. Improving storage density and space utilization can be thesolution to eliminate other costly alternatives.4. Shorter product lifecycles demand high flexibility within the work site and greater speed tomarket with new products. Product transparency as it relates to warehousing automationkeeps the management and delivery of materials to production a consistent process. Byreducing or eliminating the human element, material flow will keep up with production demandsallowing manufacturers to focus on new product introduction, assembly processes, andquality. Commonality of containerization is the key for the highest flexibility and transparency inthe material flow process.5. Global competition is the number one threat to manufacturing companies across the country.More than ever, companies are forced to look at solutions that will reduce the total cost ofmanufacturing. Reduced labor cost, improved space utilization, less inventory on hand, higherthroughput, and improved shipping accuracy are just some of the door to door elements that willhave a positive affect when the right warehouse solution is chosen.
- #9 PPU – The value is based directly on the price of the good being supplied.TCA – The value is based on the PPU and the cost of acquiring the item including transportation costs, shipping costs, storage costs, etc. TCO - The vlaue is based on PPU + TCA and all indirect costs, cost to purchase, paperwork, time, etc.TVM – The total costs of TCO + All other includes lead time, product quality, sourcing effort, organization direction, certifications, etc.TVM is sourcing for value not. Finding the right price with the greatest value which is not always the lowest price.
- #10 PPU – The value is based directly on the price of the good being supplied.TCA – The value is based on the PPU and the cost of acquiring the item including transportation costs, shipping costs, storage costs, etc. TCO - The vlaue is based on PPU + TCA and all indirect costs, cost to purchase, paperwork, time, etc.TVM – The total costs of TCO + All other includes lead time, product quality, sourcing effort, organization direction, certifications, etc.TVM is sourcing for value not. Finding the right price with the greatest value which is not always the lowest price.
- #11 They do much more than merely automate the sourcing process — by combining greater transparency with better optimized analysis of complex bids, they enable buyers to achieve far greater savings than they could achieve with traditional manual methods..
- #12 They do much more than merely automate the sourcing process — by combining greater transparency with better optimized analysis of complex bids, they enable buyers to achieve far greater savings than they could achieve with traditional manual methods..
- #13 In an ordinary auction (also known as a forward auction), buyers compete to obtain a good or service. In a reverse auction, sellers compete to obtain business.Examples would be mfg.com, firstindex, etc.
- #14 If the buyers do not know who you are how can you efficiently with TVM in mind satisfy the buyers.
- #15 http://inboundmarketinghelp.com/1/business-without-website-like-man-without-face/EVS Example - They were there, answered the phone, multi-million dollar contract awarded
- #16 http://inboundmarketinghelp.com/1/business-without-website-like-man-without-face/EVS Example - They were there, answered the phone, multi-million dollar contract awarded
- #17 Examples Give Pro’s and Con’s of each of these items listed.
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